JUDGMENT - D.R. DHANUKA, J.:---The petitioner carries on business in the name and style of M/s. Hotel Sunraj situate at Bandra, Bombay, as Sole Proprietress thereof. The said restaurant is situate at a distance of about 65.54 Sq. metres from St. Elaisis School and the Church.

2. On or about 7th August 1987, the petitioner made an application to the Collector of Bombay, Prohibition and Excise Department for issue of a licence popularly known as `Permit Room Licence' (i.e. F.L. III Licence) under Rule 45 of the Bombay Foreign Liquor Rules, 1953 for sale of foreign liquor etc. at the abovereferred restaurant. The Deputy Superintendent of Prohibition and Excise by name of Shri Ghodke visited the restaurant and made his report to the Superintendent of Prohibition and Excise. On 9th December 1987, the Government of Maharashtra informed the Commissioner of Prohibition and Excise that the Permit Room Licence known as FL-III Licence be granted to the petitioner on the conditions set out therein. Condition No. 2 prescribed by the Government of Maharashtra in the said Order of sanction reads as under :

"There should be no approved educational institution or registered religious institution or bus stand, station or depot of the Maharashtra State Road Transport Corporation or State or National Highway within 75 metres from the hotel."

On 14th December 1987, the Collector of Bombay communicated his decision to the petitioner to the effect that the request of the petitioner for grant of F.L. III Licence was granted subject to conditions set out therein. After the petitioner complied with the usual conditions prescribed by the Collectorate, the Collector of Bombay issued Licence No. 351 of 1987-88 in favour of the petitioner known as F.L. III Licence as contemplated under Rule 45 of the Bombay Foreign Liquor Rules, 1953 permitting sale of foreign liquor at the said restaurant. Condition No. 2 prescribed by the said letter did not have sanction of law at the material time as no such distance restriction was then prescribed by Rule 45 of the Bombay Foreign Liquor Rules, 1953 and Circular letter dated 4th September 1987 was not even published in the Official Gazette. As a matter of fad such a condition was not being followed by the authorities at the material time on uniform basis. The said licence was made operative for the period 14th December 1987 to 31st March, 1988. It is not disputed that these licences are normally renewed or regranted every year on 1st of April of each year unless the licence-holder has committed breach of the provisions of the Bombay Prohibition Act, 1949 or the Rules or the valid conditions of licence in the meanwhile. The petitioner paid licence fee of Rs. 20,000/- as well as deposit of Rs. 5,000 to the Collector of Bombay and the Collector of Bombay authorised the petitioner to sell foreign liquors at the said restaurant situate at Rahat Manzil, 76, Ambedkar Road, Bandra (West), Bombay, by virtue of issue and operation of the said licence.

3. On 22nd February 1988, the Collector of Bombay issued a show cause notice to the petitioner calling upon the petitioner to show cause as to why the said licence should not be cancelled. It was stated in the said show cause notice that it had come to the notice of the Office of the Collector of Bombay that an educational and religious institution i.e. St. Elaisis School and Church existed within distance of 75 metres of the restaurant. There is no other dispute between the parties in respect of any other condition concerning the said Permit Room Licence or in respect of suitability of the premises or otherwise. By her Advocate's letter dated 7th March 1988 and 9th March 1988, the petitioner replied to the said show cause notice. By the said reply letters, the petitioner contended that the condition mentioned in licence dated 14th December, 1987 regarding the distance between the restaurant premises and the compound of the Church and the School was arbitrary and against the Rules. It

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